PPLâ s Pilot Rooftop Solar Program-Workshop 26June2018-Final · (&2120,& &2168/7,1* $662&,$7(6 zzz hfd xn frp 31* 3rzhu 3lorw 5rriwrs 6rodu 3urjudp &rqvxowdwlrq :runvkrs -xqh

ECONOMICCONSULTINGASSOCIATES

www.eca-uk.com

PNG Power Pilot Rooftop Solar Program

Consultation Workshop

26 June 2018

PNG Power’s Pilot Rooftop Solar Program

Objectives and background

Scope of the program and types of connections

Technical aspects of rooftop solar PV system

Technical standards and application procedures

Future tariffs and net metering

3

Solar has the potential to bring significant benefits to PNG

Key benefits

Displace expensive diesel generation at peak hours

Reduce network losses, because of proximity to load

In the longer-term, reduce burden of generation and network investments

Reduce carbon emissions

Solar potential in PNG

Solar irradiance appears to be good, particularly on the coastal areas

Works well alongside hydro storage

4

The potential benefits

Energy

Capacity

Grid Support?

Security

Environmental

Macro-Economic

ENERGY• avoided fuel costs• reduced system losses

CAPACITY• avoided generation investment• reduced network investment

GRID SUPPORT?• unlikely but possible with

advanced inverters

SECURITY• diversification of supply services

ENVIRONMENTAL• pollutants and carbon emissions• land and water requirements

MACRO-ECONOMIC• employment• tax revenues

FINANCIAL

SOCIAL (externalities)

5

The potential costs

Capacity

Grid Support

Security

CAPACITY• solar PV investment costs• connection & grid reinforcement

GRID SUPPORT• balancing (ramping & cycling)• frequency response• reactive power & voltage control• forecasting (operating reserves)

SECURITY• storage and back-up capacity

FINANCIAL

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Solar PV has already arrived in PNG and is going to get cheaper

There is strong interest among private sector developers in installing rooftop solar PV

To reduce their cost of supply

As part of their corporate/social responsibility

Several large customers have already installed rooftop solar PV systems

Including CPL (200kW), Air Niugini (100kW).

PNG Power staff have conducted some testing of these installations, but they are currently disconnected until the technical and commercial terms of connection are clearly defined by PNG Power.

The technology is here to stay

Solar PV will continue to get cheaper (~20% per year)

Battery costs are currently too high to make standalone systems cost-competitive with the grid. But this may change over time.

Other Pacific Island countries have taken first steps to allow some rooftop solar PV (Vanuatu, Tonga)

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Scope of the solar PV program

Small solar PV systems (usually installed on a rooftop)

For a customer’s self-consumption (customer is a net importer from grid)

Synchronised to the grid (i.e. no battery storage). Grid act as a storage. Excess power can be exported and required power can be imported.

Larger solar PV systems (that are primarily for export to the grid), are procured separately as IPPs.

Isolated/Offgrid systems (that are not connected to the grid)

Rooftop business models

Self-supply

Net metering, net billing

Buy all / sell all

Sell to the utility

Stand-alone

Wheeling

Embedded

Isolated/Offgrid systems

SHS – leasing / purchase / utility

Solar and hybrid mini-grids

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Possible technical issues to be managed

Ensuring quality solar equipment

It is important that customers install high quality PV modules

and inverters.

Poor quality inverters may lead to issues with harmonics, DC injection, reactive power, sensitivity to voltage and

frequency, and even voltage collapse. Cheaper, low quality PV

modules will degrade over shorter time and customers will

lose faith in the technology.

Ensuring correct installations

There is limited knowledge and experience of solar PV

systems in PNG.

If the system is not designed, installed and maintained

correctly, it may cause issues within each solar PV system as well as PNG Power’s grid.

Intermittency of solar PV

How well will PNG Power’s existing grid copy with the inherent intermittency of solar? Solar irradiation levels are not yet well

understood. It will take time to establish reliable forecasting models.

Too much solar would aggravate grid stability. Other customers could experience change in

power quality.

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Possible commercial issues to be managed

Fair treatment of customers

Some cross-subsidies exist, including between

commercial and residential customers, and between urban and rural areas.

Should be careful to ensure that commercial customers do not reap the benefits of solar PV at the expense of

residential customers.

Reflecting the variation in cost by time of day

PNG Power’s cost of generation varies by the time of day and therefore so will the value of

excess solar PV generation that feeds into the grid.

It is currently most expensive during the peak hours in the

middle of the day, which, fortunately, largely coincides with

peak solar PV. Avoided costs could change in the

future.

Recovery of capacity costs

PNG Power always has to provide standby capacity,

including standby generation and network capacity. Even when a customer’s solar PV is

generating.

Under the current tariff structure, residential and commercial customers do not pay a capacity or fixed

monthly charge.

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Implementing a pilot program will allow PNG Power to carefully monitor and manage the technical and commercial impacts

Implement pilot phase

Only allow certain types of installations

Only allow installations in certain locations

Limit individual sizes of installations

Limits the total capacity of solar PV

Limit crediting of exports

Monitor and evaluate

Monitor impacts on grid stability

Monitor changes in load profiles of solar customers

Monitor commercial impacts of rooftop solar

Train PNG Power staff in testing and commissioning

Improve forecasting of solar irradiation/generation

Next phase of solar program

Adjust tariff structures

Increase capacity limits

Make scheme available to other customer types

Credit imports

Reinforce distribution networks

Implement solar grid support, active filtering etc.







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Initially, a cumulative capacity limit of 2MW

• PNG Power will approve applications for the connection of solar PV systems to its distribution networks on a first-come-first-served basis

• So long as the connection will not result in the total capacity of approved Net-Metered Solar PV Systems exceeding 2MW

Limits the impacts of new solar installations on the stability of PPL’s network

Set in terms of cumulative MW capacity terms for ease of understanding and implementation

Currently translates to approximately 2% of peak load in the Port Moresby system

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Initially, only commercial customers eligible

• The customer has a maximum demand for electricity of at least 300kVA at the premises

• The capacity will not exceed the customer’s maximum demand or 1,000 kW, whichever is smaller

Limits the number of participants, which allows PNG Power to closely monitor the performance of individual systems as well as grid

Large commercial and industrial customers consume their electricity mostly during day-time when the solar resource is available, so exports to the grid will be minimal (unlike residential customers)

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Initially, only connections to the Port Moresby grid allowed

• Solar PV systems may only be connected to the Port Moresby distribution network

• Excludes solar PV systems that are connected to the transmission network or for the sale of electricity to PNG Power or to another licensee

Port Moresby is PNG Power’s most stable network, so is best able to cope with the intermittency of grid-connected solar PV

The potential value of solar is actually higher in other grids that rely on diesel generation during peak hours

PNG Power may introduce larger solar PV systems, which are dedicated to exporting energy to the grid, under separate arrangements (e.g.) competitively-procured Independent Power Producers







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Technical Aspects of Rooftop Solar PV System

Rooftop Solar PV Systems might be implemented under Grid-Connected or Off-Grid Modes

The Key Technical Parameters to consider for implementing a Rooftop Solar Project are

- Resource

- Potential

- Technology

-

DISCOM GRID

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Resource –

The resource assessment comprises Solar Radiation (GHI), Temperature and other meteorological parameters.

Potential locations of PNG receives annual GHI more than 1800 kWh/m2 which makes if suitable for solar PV projects.

Source - http://globalsolaratlas.info

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Availability of Shadow Free Rooftop Area

Strength of the Building Structure

High Usable Area

Potential –

The area requirement for rooftop solar PV is considered as 10-12 m2 per kW capacity system.

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Technology

Modules and Inverters are two major components of a typical Rooftop PV system.

Crystalline solar PV technology is most accepted option in rooftop PV.

Flexi type of solar PV modules are good to implement the project in lesser time.

TIER-1 manufacturers are recommended for bankability of the projects.

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ELECTRICITY PRODUCED <=CONSUMPTION

All Solar Produced electricity is Consumed on site and

only differential electricity drawn from grid

AC LOADS

GRID

CONDITION # 1

Net MeterDistribution Box


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ELECTRICITY PRODUCED > CONSUMPTIONExcess Solar Power is exported to Grid Through

Bidirectional Meter

CONDITION #2


AC LOADS

GRID


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AC LOADS

GRID

NO GRID = NO ELECTRICITY GENERATION!


Anti islanding


CONDITION #3.1

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GRID


INVERTER SWITCHES ON AND SYNCHRONISES WITH DG SET

TO GENERATE AND SUPPLY ELECTRICITY

CONDITION -3

AC LOADS


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Solar equipment standards

• Solar PV modules should conform to standards IEC 61215, IEC61646, IEC 61730 or equivalent

• All Inverter equipment installed for Net-Metered Solar PV Systems should meet IEC 61727 (2004 -12), IEC61683, IEC62109, IEEE 1547 – 2003 or latest available equivalent standards

• Minimum requirements for system documentation, commissioning tests and inspection as per IEC62446

• Conformity to standards for both solar PV modules and Inverter equipment should be fulfilled by producing a Type Test certificate from an accredited testing laboratory, provided to the customer by the manufacturer or the re-seller of such equipment

• In the absence of a Type Test certificate, a laboratory test certificate may be submitted, from an accredited laboratory

IEC = International Electrotechnical Commission

IEEE = Institution of Electrical and Electronic Engineers, USA

Type Tests are intended to verify compliance of the design of given equipment with the stated standard, performed on one single specified electrical equipment of one type and are intended to check the design characteristics







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Eligible solar PV systems must operate in parallel with the grid

• Solar PV System with grid-tied Inverter, operating in parallel with the grid

• Should not directly distribute electricity within the customer premises either in DC or AC. The only connection should be at the LT/HT switchgear near the energy meter

• Lockable AC isolation switch should ensure physical isolation between the customer’s electrical equipment, the PNG Power service line and the solar PV system

M

Customer’s electrical

equipment

11 kV 415 V

Isolator(lockable)

Grid tie inverter Solar PV

modules

PPL Customer

Power Flow

Position to the meter (M) and voltage values are indicative. Metering at 11kV or higher voltages, and connection of the solar PV system inverter at a different voltage is acceptable, within allowed voltages stated in the grid code and other regulatory documents

Solar PV system diagram

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Must include an import-export meter that will enable net-metering

• Customer’s existing energy meter replaced with an import-export meter. Customers are advised to install another energy meter for recording output of the solar PV system

• When the customer’s equipment requires more power than the output of the solar PV system, electricity will freely flow from the PNG Power grid to the customer, through the import-export meter. And vice-versa

• The customer should plan his solar PV system in such a manner that no more than the customer’s monthly energy requirement is delivered by the solar PV system

PNG Power will install the new meter once certification of a new installation is complete, prior to commissioning

PNG Power plans to introduce net metering in future phases, once the commercial impacts are better understand and tariffs have been calibrated accordingly

Discussed later in this presentation

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Installation of solar PV system

• The electrical installation of the solar PV system should be conducted by a Licensed Electrician or a Licensed Electrical Contractor

• Electrical wires and accessories used for electrical connections should conform to AS/NZS standards or equivalent

• Electrical installation should conform to AS/NZS 3000 Wiring Rules and all other standards and practices approved by PNG Power

• The connection of the solar PV system to the grid should be through an isolator, installed within a lockable enclosure, in a location accessible by PNG Power’s maintenance staff

May introduce such a requirement for future phases of this program once smaller customers are eligible

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Monitoring system

• The customer will install an on-line monitoring system for the solar PV system, which in the minimum, should measure at five-minute intervals (or at shorter intervals) and store (a) AC terminal voltage, (b) AC power (in kW), (c) power factor

• This stored information will be sent to PNG Power at the end of each day, through a GSM link, for which the customer is required to install and pay any associated fees

• The information should also be stored in the on-line monitoring system for a period of at least one year, and, upon PNG Power’s request to the customer, should be downloaded and provided to PNG Power

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Testing and certification

• Pre-commissioning customer testing: Customer must use a Licensed Electrician or a Licensed Electrical Contractor (licensed by PNG Power) to test the installation, declare it ready for commissioning and issue a certificate

• Inspection and certification: The Licensed Electrician or the Licensed Electrical Contractor will facilitate the testing by the Certification Engineer appointed by PNG Power. Testing will include:

• Isolation arrangement

• Loss of mains protection, to ensure the Inverter does not cause unintended islanding

• Power quality, including harmonic and flicker analysis.

The Certification Engineer appointed by PNG Power will not test the solar equipment itself

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Application process

1. Application: A customer must first submit an application to the PNG Power and pay the application fee. The application will be evaluated by PNG Power and approved or not

2. Testing and certification: Once the customer has installed a solar PV system the customer will request testing and certification. PNG Power will arrange for a appointed Certification Engineer to test and certify the installation within two weeks

3. Commissioning: Once PNG Power has certified the installation, PNG Power will install the energy meter (to be paid for by the customer), and then approve commissioning within two weeks

Customer has six months to request testing and certification. If this six months is breached, the customer’s approval is revoked and they must reapply

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Simple two page application form







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PNG Power’s proposed tariff/commercial arrangements

Solar customers will remain on their existing tariff (General Supply or Industrial)

Electricity exported back to the grid will notbe credited or paid for

Tariffs will be adjusted to better reflect costs (energy + capacity charge)

Electricity exported back to the grid will be offset against consumption (net metering)

During the pilot phase Future phases

• Customers can remain in the scheme for 10 years

• PNG Power has the right to change tariffs at any time

Example analysis of commercial impacts on PNG Power

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Putting it in context: solar is changing the game for utilities

The traditional reality: Customers must accept tariffs

In vertically integrated systems, customers traditionally had no alternative supplier

Customers therefore had no choice but to accept the tariffs set by the utility, regardless of the level or design

Set the energy charge (K/kWh) too high: Customers may install lots of solar, the utility will not recover its capacity costs

Set the energy charge (K/kWh) too low:Customers may not install solar at all, despite it being economically efficient

The new normal: Competition from solar

Customers have the option of installing rooftop solar to supplement (or even substitute) grid supply

Tariff design matters!

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As solar uptake increases, cost-reflective tariffs become more important

Downward spiral

If customers do not pay cost-reflective tariffs and significant numbers start installing solar:

Customers will consume less from the grid and the utility will no longer recover all of its capacity costs

Which forces the utility to further increase tariffs to recover fixed costs (from less total consumption)

Which will further encourage customers to install solar

This can easily be avoided by using two-part cost-reflective tariffs

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What are cost-reflective two-part tariffs?

Demand charges (K/kW)

Energy charges (K/kWh)

• Used to recover generation and network capacity costs. Should be based on demand (kW or kVA) at time of system peak, as this is the driver of investment needs.

• Used to recover the variable costs of additional electricity supply in each interval.

This ensures that even if a customer consumes nothing from the grid, PNG Power will still recover its capacity/fixed costs.

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Are two-part tariffs really that difficult to implement?

Too expensive to upgrade the meter

May impact on affordability (customers have to pay something, regardless of the total amount of consumption)

Difficult to understand the tariff

Solar installation requires upgrading the meter anyway

Affordability is likely not an issue for customers able to front the cost of installing solar and consumption levels are likely high

Complex tariffs are a necessary consequence of maintaining two power supplies (grid + solar)

Conventional arguments against two-part tariffs for residential customers:

But do these arguments still stand for rooftop solar?

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What is net metering?

‘Net metering’ refers to the billing mechanism for dealing with this exported power

Exported power is ‘banked’ for a time and offset against future consumption from the grid. It is a kWh-for-kWh offset. Customers are never paid if they end up exporting more than they consume. Therefore, capacity of solar PV system has to be carefully decided considering power and energy requirement in the premise.

*

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Net metering v net billing

Metering

Net metering Net billing

• Bi-directional or two meters

• Two meters

Energy sold • Credited in kWh• Paid in cash /

off-set

Timing of sale • End of period • Instantaneous

Value of sales • Fixed • Can vary by time

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Before revising tariffs and allowing net-metering, PNG Power will use the pilot to better understand the impacts of solar generation

Solar output is largely highest during peak hours

Peak hours are currently supplied by diesel generators, but this may not be the case in the future

Will vary by PNG Power grid

Avoided cost can be used to determine revenue impacts and revise tariffs accordingly

ECONOMICCONSULTINGASSOCIATES

www.eca-uk.com

Documents

PPLâ s Pilot Rooftop Solar Program-Workshop 26June2018-Final · (&2120,& &2168/7,1* $662&,$7(6 zzz hfd xn frp 31* 3rzhu 3lorw 5rriwrs 6rodu 3urjudp &rqvxowdwlrq :runvkrs -xqh